Not only is journalism hell, it hardly pays anymore either. NiemanLab’s Ken Doctor recently published an overview of the US daily newspaper industry’s revenue sources. These currently cannot even keep up with inflation, let alone match overall economic growth.

Digital paywalls have worked out quite well but are inherently limited to people who really like their publication, as the rest will simply seek out the Internet’s plentiful free alternatives. Doctor estimates that most potential subscribers have already been reached, and direct reader revenue will more or less plateau in 2014.

Digital advertising has likewise stopped growing – for newspapers, that is. The industry overall still grows briskly but all the growth goes to Internet giants such as Google and Facebook. Print advertising has collapsed, of course.

New revenue streams including event marketing and e-commerce might eventually allow publishers to survive and resume growth, but as this leads beyond actual journalism it’s not my focus here.

Doctor cites one notable exception in the US market: the New York Times is actually growing revenue at a pace nearly matching inflation. Subtract this massive global business from the industry totals, and the situation for your average smaller newspaper looks even worse. Let’s look at the revenue situation in more detail, and then consider whether traditional journalism could or should have a future.

Advertising Revenue

During the 20th century, most journalism used to be primarily financed by advertising. Around the year 2000, US newspaper advertising revenue began falling off a cliff that sent print below inflation-adjusted 1950 figures by 2013. Print advertising continues to be comatose for both newspapers and magazines. World Press Trends 2013 show the same bleak picture for Europe as for North America, although other regions are still growing.

Free advertising-financed dailies, perceived as a huge threat in Europe just before the 2008 crash, consequently cratered as well and are on a steady downward trend. Additional revenue from online advertising just barely slowed the decline, to around 1954 levels. While Google is raking in money from search ads, journalistic publishers are struggling to get past zero growth.

As an individual example, former Newsweek technology editor Dan Lyons left the media business in 2013 because he saw no future for advertising-driven publishing, and would rather openly write marketing articles than producing “SEO chum” in a shrinking industry.

I came to the realization that advertising is dying, and therefore any business that depends on advertising to pay the bills is a dead end. I also had grown less and less enchanted with the kind of work I was doing as a “mainstream” journalist.

There’s also the problem that readers quite strongly dislike advertising polluting the content they came for. AdBlock creator Michael Gundlach claims around 30% of Internet users block ads; research company PageFair puts the average at 22.7% for 220 examined websites. Ad blocking was at the time growing by 43% per year, meaning any advertising-driven business would end by 2018 or so! While that prediction is dubious, the precarious state of advertising revenue is real. Dr. Dobb’s Journal ceased publication of new content because revenue kept declining despite growing readership.

10 March 2015: Notable tech website Gigaom shuts down due insufficient revenue from either advertising or subscribers. DDJ’s Andrew Binstock weighs in during the ensuing Hacker News discussion, with others commenting that Gigaom started with an immense debt of US$ 22 million and proceeded to hire a staff of 70! Gigaom was good but hardly unique enough to support such grandiosity in a field (technology news) that’s overreported a hundred times over by similar free websites.

New Revenue Sources

There were attempts to generate revenue from other sources than advertising and direct reader payments. A popular hobby among European publishers last year was trying to extort money from Google. This failed spectacularly in Germany and led to Google simply shutting down Google News in Spain, causing reduced income for publications that now got less traffic than before.

Or one might try selling out the last remnants of journalistic integrity to sponsored content. Companies – often ones that also purchase advertising in the same publication – either directly supply articles or pay for an article about a desired topic. While sponsorship is typically (still) noted somewhere in the article, this paid coverage is otherwise indistinguishable from ordinary editorial content. Tanzina Vega’s 2013 roundup names seven of the biggest American web magazines as sellers of sponsored content: Atlantic, Business Insider, BuzzFeed, Forbes, Huffington Post, Mashable, Washington Post.

If done semi-covertly this destroys journalism as the self-styled purveyor of objective truth. If done openly, like Dan Lyons, it would be one of Ken Doctor’s new alternative revenue sources: perfectly valid economically but clearly not journalism in any traditional sense. Sponsored writing is merely one of many competing voices on the Internet that are openly biased, and as such not intrinsically different from random bloggers.

Direct Reader Payments

That leaves the traditional option of directly selling content to readers. You will find plenty of articles claiming that paywalls don’t work but that’s not quite accurate. Paywalls do work – but only for certain publications and up to a certain volume. The poster child for paywall success if the New York Times which had introduced one in 2011, and found that by 2012 its $91 million digital subscription revenues overcompensated for declining ad revenues. Digital subscriber growth did slow eventually, but only as it approaches the one-million mark.

My interpretation of this situation is the one I’ve outlined in Return of Patronage: without the constraining force of physical reproduction and distribution, the price of information and entertainment is driven to zero simply due to the broad availability of free alternatives. Any continuing reader payments are essentially goodwill donations, made not because the readers could not otherwise obtain equivalent content, but rather because they wish to support a specific publication. So journalistic publications will likely divide between those that excel at serving a loyal paying audience, and those big enough to survive on stagnating ad revenues for their clickbait headlines.

Redundant Packaging

Compared to novels or music, journalism faces an additional problem as it transitions to the Internet. Traditional print media did not just set a minimum price point that has fallen away, it also required packaging a broad variety of semi- or unrelated writing in the same distribution unit. Moving to the Internet publishers have retained the same packaging, bundling a broad range of both writers and topics on the same branded website. As Thomas Baekdal has astutely observed, this is rather pointless on the Internet where articles are easily discovered and retrieved individually, and also counterproductive in terms of serving an audience that’s typically interested in only a fraction of the presented topics.

Moreover, digital social media and personal weblogs are surprisingly similar to older forms of social communication. Before the advent of mass media, people would share news and opinions by reading each other’s journals and writing frequent lengthy letters intended for sharing with others. So in a sense ubiquitous Internet access simply enables a return to the historical norm of 200 years ago.

When everyone can directly publish articles for all to see, centralized agencies that repackage and distribute random bundles of unrelated news look rather useless. That leaves a certain quality assurance as traditional journalism’s supposed remaining benefit: objectivity, thoroughness, responsible selection of important news. If you’re already laughing you know what’s coming in the next sections…

Pervasive Cluelessness

Sampling 6,000 college-educated high-income households in 27 countries, Edelman Trust found that online search engines passed traditional media as the most trusted news source in 2015. The implication seems clear: a majority of well-educated people worldwide considers professional journalists so biased and unreliable, whether by design or accident, that they’d rather check Google first.

The most obvious deficit of professional journalism is the lack of expert knowledge on its subjects. As the saying goes, whenever the media gets a subject completely wrong that you know well, this should make you very suspicious of its competence on things you don’t know. Science reporting is a notorious hype factory, and while the hype originates with academic PR departments, most journalists just lap it up credulously – and then add some more hype of their own. Consequently, expert blogs like the University of Cambridge’s Understanding Uncertainty (on statistics) spend much effort on correcting newspaper misreporting. Looking at politics, Andrew Potter recommends following experts directly as a way of avoiding the usual half-baked horse-race political analysis that journalists truck in. While real experts occasionally contribute articles to traditional media, the latter’s existence is clearly optional here.

Information technology is a field that journalism barely even touched before its decline began. Nobody missed it; all the big IT news sites I’m aware of aggregate writing by programmers and other independent domain experts, although some specialized journalists might cover business topics. Conversely, while mass media has always been covering health and nutrition, that coverage has been consistently appalling: a sequence of contradictory fads, often baseless or even damaging, such as the war on saturated fats that’s now winding down. As with general science reporting, journalists rarely did any fact-checking or skeptical analysis, instead pushing simplistic PR tales. I’ve long switched to first-hand science news and personal blogs like P.D. Mangan’s as clearly superior sources of information.

Lastly, one juicy anecdote occurred while I was writing this post: NBC reporter Brian Williams completely fabricated a story of riding a helicopter in Iraq while it was shot down. He and NBC both made this claim repeatedly since 2003, and once he finally admitted its falsehood he called it “inadvertent” – a jaw-droppingly stupid excuse that his fellow journalists actually supported! Nothing illustrates as clearly as this little episode how willing professional journalists are to lie, and to defend liars.

Systematic Manipulation

Which brings us to deliberate manipulation. In late 2014 Crowdpac published a handy chart on donation data that illustrates where various professions stand in America’s liberal/conservative spectrum. Academics, entertainment, online services, and newspapers & print media (a.k.a. The Cathedral) were extreme liberal outliers among all industries, all scoring higher on the liberal side than any industry did on the conservative side. The same extreme bias appeared in a 2005–10 survey of journalists in Germany (German article), with journalists up to four times more likely to sympathize with the far-left Greens than the general population – and only a quarter as likely to sympathize with the center-right CDU/CSU. Among journalists, far left is the dominant mainstream.

It would be surprising if such bias had no effect on reporting, and indeed it does. Last year provided numerous examples. An entire series of rape hoaxes culminated in a Rolling Stone story that was an obvious lie chosen to match the writer’s prejudice, yet still found plenty of outraged believers among liberal journalists. Similarly, when mass media reported on GamerGate it tended to unquestioningly support the PR narrative of a few professional “victims” that paints GamerGate as a far-right misogynistic hate mob. For the feminist liberals who actually constitute a majority of GamerGate supporters, this first-hand experience with blatant manipulation came as a rude surprise that sent their trust in liberal media sharply downward. Germany’s PEGIDA movement was already aware of such mendacity and consequently refused to speak with journalists altogether, a decision the latter quickly justified by basing their “reporting” almost exclusively on lies and insults (German article).

Fragmented Future

The previous sections illustrate why the quantitative decline of journalism is probably a very good thing. Journalistic bias and incompetence will not disappear, nor for that matter will left and far-left leaning media. However, readers are no longer limited to whatever selection of physical newspapers sits in their brick & mortar stores; and the abundant advertising revenue is drying up that helped isolate writers from their audience, allowing them to indulge their own propagandistic inclinations. Going forward, the primary means of financing journalistic products will be direct voluntary reader payment – and thanks to the Internet, those readers will have direct access to the entire available spectrum of publications.

In the long run, this must have the effect of forcibly aligning the ideological spectrum of writers with that of readers. No matter that 50% or 90% of would-be journalists would like to write left-wing propaganda – if they must find an audience that voluntarily pays for their work then most will either have to write something else, or go flip burgers. The same goes for gross incompetence on subject matters: journalists who would like to keep getting paid must develop their own reputation and become at least competitive with the many domain experts who already write for free.

Certainly, the best and most popular left-leaning outlets will continue to thrive on reader goodwill, as the paywall success of the New York Times demonstrates. But the mass of mediocre also-rans will be weeded out, and publications that were previously marginalized by journalistic cartels and physical distribution limits will compete on a much more equal basis. Given the chance, one may expect that right-wing readers will happily pay to have their biases represented, just like the NYT audience. So the facade of unanimous published opinion gives way to the true fragmentation of public opinion. The political consequences for Western mass democracies should be quite interesting, to say the least.

Addendum 2015-02-12

Shortly after finishing this post, I remembered one older relevant article and found two new ones.

Baseless Claims: Craig Silverman’s Lies, Damn Lies, and Viral Content (PDF) extensively analyzes how news websites don’t verify reports, instead merely linking to other unverified reports by their colleagues; don’t follow up on initial reporting, which is unsurprising as they invested so little effort in the first place; and use biased language that belies the actual uncertainty of their claims, or hedging language to compensate for their lack of investigation.

GamerGate: David Auerbach aptly called the reaction of video game journalists to GamerGate rage-quitting their meal ticket. The writers reacted in such an amazingly hostile fashion to their audience, in terms of both unethical behavior and openly insulting articles, because they were already in the process of losing that audience. Who succeeded them? Independent domain experts, of course – in this case usually YouTube personalities with millions of subscribers.